About this Author

College chemistry, 1983

The 2002 Model

After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases.
To contact Derek email him directly: derekb.lowe@gmail.com
Twitter: Dereklowe

August 9, 2007

Buying What You Can't Make? Or What?

Posted by Derek

I didn't note it at the time, but Amgen just recently finished buying a smaller company, Alantos. That cost them about $300 million, and for that money they got a diabetes drug in the clinic and a program generating compounds for arthritis and other diseases.

Sound OK, eh? That's the one-line executive summary right there, but look closer: the diabetes drug is a DPP-IV inhibitor. There's nothing wrong with that, except that this one is going to be what, if it makes it to market - fourth in line? Fifth? I've lost count. The Alantos compound may be a good one (Amgen certainly thinks so), but it's a crowded space, for sure.

And the arthritis drugs? Matrix metalloproteinase inhibitors. No, no, it really is 2007, not 1995. MMPs have been the subject of a big old pile of drug development over the years, all of which (to my knowledge) has come to grief. Again, there may be something particularly good about these (Amgen certainly thinks so), but it's a well-trodden space, for sure.

This deal makes me wonder a bit about Amgen's small-molecule pipeline. They don't talk much about it, although they have a lot of people doing traditional med-chem these days. No one seems to know what they're up to, though, and the inlicensing of drugs from such well-known therapeutic classes - ones that have not been particularly difficult to find lead compounds for, yet - is food for thought.

(As a sideline, Alantos, at least in its early days, was a champion of relatively exotic approaches like dynamic combinatorial chemistry, which I'll have to write a post on some day. Anyone know if these compounds came from that kind of work, or is this another case where the neat stuff never generated any drugs?)

Amgen's had problems with its discovery labs for some time, and the clinical group hasn't been so hot either. The reason Amgen bought Immunnex was partly for its labs, not just the TNF-alpha drug. The Amgen labs had been notoriously unproductive, and while Amgen moved all the Immunex clinical folks down to SoCal, the discovery lab people were left alone in Seattle. I suspect that the problem of poor performance in discovery hasn't improved much since the Immunex purchase--it's basically the same execs in Thousand Oaks making the same mistakes, now with new scientists in Seattle reaping the "benefits" rather than those in SoCal.

Bottom line: Amgen's small molecule pipeline remains very weak. I doubt that this acquisition will undo years of bad decisions.

If Amgen is smart they will simply kill the small molecule effort altogether. It is not what they are good at.

Back a few months ago, some people might have suspected Amgen of spending money so that they'd be a less likely takeover target. The stock was really cheap. Thus the $300M for these tired targets. They were supposed to have gotten a bunch of near-drugs from Tularik, too -- anyone know whatever became of those? Now that they've done such a bang-up job defending their anemia franchise (revenue loss expected to be 40% on Aranesp) they might not have to worry so much, after all.

The venture of Amgen in the small molcule circus will take years to show results. It is not enough with bringing in people like Reider, Martinelli and so on, but you need talent to execute the plans. They have hired quite good people in the last few years but it will take a while until they can achive results.

I had the chance to interview at T.O. not long ago and while the new hirees were brilliant, the people that has been there from 3-10 years were scientifically fairly poor (being generous).

had the chance to interview at T.O. not long ago and while the new hirees were brilliant, the people that has been there from 3-10 years were scientifically fairly poor (being generous)

Well, I'd say that probably 95+% of small molecule people at Amgen came from Big Pharma, so statistically they got the same talent mix as everyone else. However, even brilliant scientist will fare poorly under bad leadership. (This is a far-fetched example, but how come Russian engineers never made a decent car ;-).

Someone (at another blog) recently mentioned that the same scientific leadership which almost bankrupted Merck several years ago is now doing the same job at Amgen.